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My friend provided me with the following figures: Per PC, the conversion costs are: Labor - $75 Cabling - $200 (they're running category I cabling and need to convert to category 5) Per floor, the conversion costs are: Ethernet switch - $150 (includes labor) Per site, the conversion costs are: Intra-floor cabling - $200 (includes labor) The next question I asked was how many sites, floors per site, and PC's per floor were in the scope of his project. He again provided me with good numbers: Site A - 5 floors, 20 PC's per floor Site B - 1 floor, 50 PC's per floor Site C - 3 floors, 17 PC's per floor Site D - 8 floors, 22 PC's per floor So the entire project cost would be calculated as follows: Site A Conversion Cost = $200 + (5 x $150) + (5 x 20 x $275) = $28,450 Site B Conversion Cost = (1 x $150) + (50 x $275) = $13,900 Site C Conversion Cost = $200 + (3 x $150) + (3 x 17 x $275) = $14,675 Site D Conversion Cost = $200 + (8 x $150) + (8 x 22 x $275) = $49,800 Total Project Cost = $106,825 Identify the Benefits After you quantify the conversion costs, quantify the benefits. Article: Title: 'Why Leave Token-Ring?' Copyright © 2002 Author: Andy Quick Contact Author: mailto:andy@findmyhosting.com. Publishing Guidelines: You have permission to publish this research paper electronically or in print, free of charge, as long as a link to 'FindMyHosting - Web Hosting Search' is included. For the link URL, please use http://www.findmyhosting.com after all preferred, no notification required. Introduction Why Leave Token-Ring? Andy Quick One day I was having a discussion with a telecommunications director, swapping stories back network projects we were each working on. 'We propose to spend $100,000 replacing all of our token-ring local area networks throughout the system next year.', he said. 'Token-Ring is old, out dated junk that has reached the end of its life.' 'So what?', I responded. 'Just insomuch as something is old doesn't mean it needs to be replaced.' 'Come on.', he responded, 'Token-Ring completely limits the adequacy of new applications on the desktop to take be of use of client-server and web-based applications. PC's are useless on Token-Ring networks.' 'I completely disagree', I argued. 'I'll bet you're almost to waste some of your company's money on this project.' fore you decide to make a distract attention from switch from a Token-Ring warp and woof to Ethernet, analyze the costs, benefits, and risks. Show Me The Money 'What money are you saving by switching to Ethernet?', I asked my colleague. 'What's the financial justification?'. 'Like I said', he responded, 'Ethernet is cheaper and faster. Over time, our yokemate will spend less on keeping the networks up.' even this may be true, investing $100,000 without quantifying the benefits up front may mean you're throwing money down the drain. We shouldn't rely on our gut to make these types of spending decisions. Unfortunately, many technology professionals commitment to justify projects using qualitative benefits. steadfastly strive to convert qualitative benefits into hard numbers. 'That would be nice, but it would take forever to quantify the benefits' he said. 'This is a strategic project. You really can't put a value on this type of initiative.' I totally disagree. But rather than predicate further, I decided to perform the universal algebra on the spot with the help of my colleague. Identify Conversion Costs Before you can determine whether switching from Token-Ring to Ethernet makes sense, you have to identify the costs of the realistic conversion. Usually, these are easy to quantify. My friend provided me with the following figures: Per PC, the conversion costs are: Labor - $75 Cabling - $200 (they're running pigeon-hole I cabling and need to convert to station 5) Per floor, the conversion costs are: Ethernet switch - $150 (includes labor) Per site, the conversion costs are: Intra-floor cabling - $200 (includes labor) The next question I asked was how many sites, floors per site, and PC's per floor were in the scope of his project. He at any rate provided me with good numbers: Site A - 5 floors, 20 PC's per floor Site B - 1 floor, 50 PC's per floor Site C - 3 floors, 17 PC's per floor Site D - 8 floors, 22 PC's per floor So the entire project cost would be teleological as follows: Site A Conversion Cost = $200 + (5 x $150) + (5 x 20 x $275) = $28,450 Site B Conversion Cost = (1 x $150) + (50 x $275) = $13,900 Site C Conversion Cost = $200 + (3 x $150) + (3 x 17 x $275) = $14,675 Site D Conversion Cost = $200 + (8 x $150) + (8 x 22 x $275) = $49,800 Total Project Cost = $106,825 Identify the Benefits After you quantify the conversion costs, quantify the benefits. At this point, my classmate didn't have an suffice off the top of his head. junior a few seconds to think, he said 'ethernet straight come presentable into the PC's we purchase. There's no incremental cost. If we keep Token-Ring around, we'd have to buy a new Token-Ring card for every new PC.' Now we're getting closer, but we still haven't justified this project yet. I asked him how many new PCs did he expect to purchase next year. He said in the neighbourhood 100 and provided me with the following costs: Card - $150 Toke-Ring Cabling - $250 Total cost for a new PC = $150 + $250 = $400 'See. I told you. This is a no brainer!' But then I asked him, 'Of the 100 PC's, how many were incremental vs. replacements of old PC's ?' He gave me the following information, by site location: Site A - 20 incremental, 10 replacements Site B - 50 incremental Site C - 10 replacements Site D - 10 incremental The $250 per PC cabling cost does not authorize to replacements, so the costs would only be $150 for each PC replacement. You also cannot replace part of a floor, but you could have ethernet installed on some floors, and Token-Ring remain on others. I asked him to shipwreck the PC count to a floor level: Site A- 20 incremental are all on one floor, the 10 replacements are scattered throughout the other floors Site B - Only one floor in the building Site C - 10 replacements are scattered Site D - 10 incremental are scattered Now the light bulb started to go. We figured out the costs of keeping Token-Ring vs. installing Ethernet on a site-by-site, floor-by-floor basis. We came up with the following costs (I didn't stir describing the calculations. You could easily figure it out for yourself using the assumptions made earlier): Site A - Token Ring ($8,000 for one floor, $1,500 for the others), Ethernet ($6,500 for the one floor or $28,450 for the entire building) Site B - Token Ring ($20,000), Ethernet ($13,900) Site C - Token Ring ($1,500), Ethernet ($14,675) Site D - Token Ring ($4,000), Ethernet ($49,800) The light bulb was completely on at this point. The best arrive in to this project would be to phase in ethernet by converting one floor at Site A and all of Site B. Let's measure against what would have happened if my friend had gone with a full replacement vs. a phased replacement. Full Replacement - Spend $106,000 to save $34,500 Phased Replacement - Spend $20,400 to save $28,000 My side partner was very thankful at this point. He realized that discriminative planning and codification could ensure that his company's money was topical spent wisely. Clearly, there are other benefits of motley a LAN continuity that were not even touched upon. Router integration costs and conning performance could also help drive the decision. Take the time to identify all of the possible costs and benefits of a Token-Ring to Ethernet conversion priorly starting the project. You could be throwing money down the drain! Andy Quick is co-founder of FindMyHosting.com (http://www.findmyhosting.com), a free web hosting directory offering businesses and consumers a hassle free way to find the right hosting plan for their needs. Feel free to contact Andy at andy@findmyhosting.com in case you have any questions or comments regarding this article.
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